While a third-party four-wheeler insurance policy is mandatory in India, it does not offer coverage for damages to your car. Hence, many car owners opt for a comprehensive car insurance policy as it offers coverage for third-party damages and damages to their own vehicle too. When you purchase a comprehensive plan, you expect it to cover all kinds of damages. However, this is not true. There are certain exclusions of comprehensive car insurance coverage that you must be aware of before making the purchase.
6 Exclusions in a Comprehensive Car Insurance
Here are the exclusions in comprehensive car insurance:
- Age of the car
This is not precisely an exclusion but an important aspect that helps determine the claim amount you can receive on your comprehensive car insurance policy. It is important to remember that the claim amount for any damage to your car is based on its current value. This is where depreciation plays an important role. When your car is new, its value is more than when it is five years old. Hence, the insurer calculates the value of the car or its parts based on its age. Therefore, the amount you can claim as compensation reduces as your car ages.
- Driving without a valid licence
Even if your car is being driven by someone else at the time of the accident, you can still receive the claim amount. It is not mandatory for the policyholder to be behind the wheel. However, it is important to ensure that the vehicle is driven by a licensed driver at all times. Insurers will reject the claim if an unlicensed driver was driving the car at the time of the accident.
- Driving under the influence of alcohol/drugs
In India, it is illegal to drive a car if you are under the influence of alcohol or any narcotic substance. Further, if the driver is under the influence of any such substance and causes an accident, then the insurer will not offer coverage for any damages.
- Damages due to wear and tear
A car has many components that go through wear and tear over time. For example, some panels might become loose or the bulb might fuse over time. A comprehensive car insurance policy usually does not cover such damages that are a result of wear and tear. Also, many insurers do not offer coverage for damages that are less than half an inch in size. Make sure that you go through the policy document in detail to understand this aspect.
- Electrical and mechanical components
Most comprehensive car insurance policies do not offer coverage for electrical or mechanical failure of the four-wheeler. For example, if the coolant level of your car is low and the engine gets damaged, then the comprehensive insurance policy will not offer coverage. Insurers offer a range of add-ons to help include such damages under the policy. However, such covers increase the premium of the policy.
- Tyres and tubes
Tyres can go through a lot of wear and tear due to bad/damaged roads or sharp objects on the road. Comprehensive car insurance policies do not offer coverage for such damages. However, if the tyre gets damaged due to an accident, then most insurers will pay half of the cost of repairs/replacement.
Are There More Exclusions in Car Insurance India?
While comprehensive car insurance policies claim to offer complete coverage, there are many exclusions where you are not protected. All these exclusions are specified in the policy document. Therefore, it is important to go through the list of exclusions before purchasing a comprehensive vehicle insurance policy. Also, make sure you choose an insurer with a high claim settlement ratio and an efficient claim settlement process. For example, the Tata AIG Car Insurance Claim Settlement Ratio is more than 98% with a hassle-free claims process. Ensure that you choose the insurer carefully.
When you decide to buy car insurance, you expect complete coverage for damages. However, many policyholders are surprised when their claim is rejected citing exclusion of the policy. Hence, it is essential to go through the policy wordings and understand all exclusions before signing the dotted line.